1. Integrating LCIA and LCM: Evaluating environmental performances for supply chain management Alan Brent  Chair: Life Cycle Engineering  Department of Engineering and Technology Management  University of Pretoria  Tel: +27 12 420 3929  Fax:+27 12 362 5307  E-mail: abrent@eng.up.ac.za

2. Foundations of LCE at UP Provincial government initiatives / support Engineering and Technology Management LCM & SHE Decision support Automotive / manufacturing industry Business school

3. Integration of the LCE activities in the Automotive Focus Group (AFG) of UP Chair in Life Cycle Engineering Chair in Automotive Manufacturing Chair in Automotive Engineering Total engineering and management support of the SA automotive industry

4. The automotive industry as a major exporter of South African products Components Vehicles

5. The main destinations of the component exports Component manufacturers 74 % to Europe (46 % to Germany) 10 % to North America Catalytic converters (26.6 %) Stitched leather seat covers(19.5 %) Tyres (6.6 %) Exhaust systems (6.2 %) Wheels (mostly aluminium) (5.4 %)

6. Future trends in the responsibility of industry Today Industry's Responsibility Tomorrow Yesterday Product Manufacturing Product Use Product Retirement Technology CostsOrganization Environment Protection Performance Endurance Economic Efficiency Environment Protection Remanufacturing Reprocessing Less Incineration Less Landfill Disposal Present Challenges: Product Take Back Regulations, Recycling, Work place Future Challenges: Life Cycle Engineering Obligations, Recyclability (waste) and Climate Protection Declarations Work place (new age)

7. Incorporating sustainable development concepts into management practices Development that meets the needs of the present without compromising the ability of future generations to meet their own needs Adopting business strategies and activities that meet the needs of the business and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future Sustainable development Business management incorporation Economic considerations Social considerations Environmental considerations

8. Three life cycles that are fundamental to management in the manufacturing industry  Project life cycles – drivers of internal change  Asset life cycles – optimise internal operations  Product life cycles – profit generation of operations Pre-feasibilityFeasibilityDevelopmentExecuting & testing Project launch & PIR Pre- manufacture Operation & manufacture Product usage Product disposal Detailed design CommissionOperation & Maintenance De- commission

9. Detailed design CommissionOperation & Maintenance De- commission Pre- feasibility FeasibilityDevelopExecute & testing Launch Product usage Product disposal Pre- manufacture Project life cycle Product life cycle Asset life cycle

10. Application of the LCE approach for different management requirements Product Asset Maintenance Project Investment Waste X Life Cycle Management

11. Sustainable supply management within the integrated Life Cycle Management approach  Integrating with existing management practices Environmental management Quality management Logistics management Procurement management Maintenance management  Understanding the value/burden addition of suppliers Added economic value Added environmental burdens Social? Operation & Maintenance Pre- manufacture

12. Accumulated value and burdens of manufactured products (environmental burdens example) Total burden Internal manufacturing burden External manufacturing burden Suppliers Facility Second- tier First- tier

13. Sustainable supply chain management therefore focuses on environmental performances Total burden Internal manufacturing burden External manufacturing burden Suppliers Facility Second- tier First- tier

14. Problems with assessing environmental performances (from an OEMs perspective in SA)  Lack of detailed environmental data in developing countries Precise environmental impact causes can not be determined  Smaller supplying countries in developing countries have only limited process information Only certain process information is currently (systematically) obtained by OEMs in South Africa –Water usage –Energy usage –Waste produced (for land filling)  Comparing environmental performances Valuated comparisons from an OEMs perspective True reflection of environmental burdens in the South African context

15. Assessing environmental performances from limited process parameters Waste produced Energy usage Water usage Determining environmental impacts Environmental performance in the SA context ?

16. Assessing environmental performances from limited process parameters (using ISO 14040) Waste produced Energy usage Water usage Environmental performance in the SA context SA-specific LCISA-specific LCIA Water extraction Electricity Raw materials Steam (on-site) Liquid fuel Med.-classified Water resources Air resources Land resources Mined abiotic resources

17. Assessing environmental performances from limited process parameters (SA-specific LCIA) Waste produced Energy usage Water usage Environmental performance in the SA context Midpoint cat.Resource groups Water resources Air resources Land resources Mined abiotic resources Water Use Eutroph. Pot. Acidif. Pot. POCP ODP GWP HTP ETP Land Use Mineral Depl. Energy Depl.

18. The impacts on the resource groups must reflect the variance in the SA eco-regions

19. Introduced SALCA Regions for impact assessment of natural resource groups

20. Environmental resources data compiled for these SALCA Regions  Water quality and quantity Measurement data of key pollutants –Metals, organics, sulphates, etc. Maximum yield and usage  Regional and global air impacts Ambient measurement data in major metropolitan areas CO 2 and CFC-11 measurement data (all regions)  Land quality and quantity Measurement data of key pollutants –Metals, phosphates, etc. National land cover database –Land uses, types, etc.  Mined abiotic resources Platinum reserves(national level) Coal reserves(national level) Ambient targets to protect resources, human health and ecosystems

21. Calculation of Resource Impact Indicators (per unit of process parameters RII G = Resource Impact Indicator calculated for a main resource group through the summation of all impact pathways of LCI constituents Q X = Quantity release to or abstraction from a resource of life cycle constituent X of a LCI system in an impact category C C C = Characterisation factor for an impact category (of constituent X) within the pathway N C = Normalisation factor for the impact category based on the ambient environmental quantity and quality objectives, i.e. the inverse of the target state of the impact category S C = Significance (or relative importance) of the impact category in a resource group based on the distance-to-target method, i.e. current ambient state divided by the target ambient state

22. Normalisation of RII performances of companies with economic value of products (to OEMs) Mined abiotic WaterAirLandMined abiotic WaterAirLand Normalisation with economic values of products (to OEMs)

23. Case study: Process parameters obtained from a South African OEM’s first-tier suppliers Energy usage ElectricityMJ Liquid fuel (diesel)kg Steam kg Raw materialskg Water usagekg Waste producedkg Economic value d R Windscreen a Tyre a Fuel tank a 63.7 0.0 60.5 0.0 2.0 b 234.1 0.0 20.4 0.0 4.6176.820.5 0.132.01.0 c 1000.001460.00500.00 aProcess parameters are shown per supplied component bNatural gas for furnace operation c10% assumed losses d9 South African Rand is equal to approximately 1 Euro (€)

24. RII values calculated per supplied component Water resources Air resources Land resources Mined abiotic resources Windscreen a Tyre a Fuel tank a 2.882×10 -1 2.779×10 -1 1.067×10 0 6.535×10 -3 6.206×10 -3 2.406×10 -2 6.148×10 -5 6.113×10 -5 2.271×10 -4 3.222×10 -5 4.051×10 -5 1.271×10 -4

25. RII values calculated per supplied component (per economic value or South African Rand)

26. Conclusions from the case study  The supplied tyre has the highest overall environmental burden per Rand value In the order of a factor of 10 compared to the fuel tank and windscreen  However, a supplied tyre has an economic value of half to a third compared with the fuel tank and windscreen The ratio difference between environmental burdens associated with the complete components would therefore be smaller  Conversely five tyres are supplied per manufactured automobile, which would increase the environmental burdens (and total cost to the supplier) by a factor of five For the specific studied sedan  But, only the manufacturing processes of the first-tier suppliers were investigated and compared Environmental performances of second- and subsequent tiers are required for an overall product evaluation

27. Determining an overall Environmental Performance Resource Impact Indicator (EPRII) Water resources Air resources Land resources Mined resources weighting Decision analysis procedures

28. Analytical Hierarchy Procedure (AHP) to determine weighting factors for the resource groups Criterion 1Criterion 2 Equally important Strongly more important Extremely more important Strongly more important AirWater AirLand WaterLand Water AbioticAir Abiotic Land Importance

29. AHP survey results and national government expenditure trends on the natural resource groups Fraction of national expenditure allocated to environmental issues Distribution of relative weighting values obtained from individual judgements Mean (geometric) relative weighting value obtained for the environmental criteria

30. Hypothetical overall EPRII for a supplier based on a comparison with another supplier (baseline) Mined abiotic resources Land resources Air resources Water resources 10 EPRII +1  w w (0.45) -1  w a (0.20) +1  w l (0.25) 0  w m (0.10)

31. Incorporating sustainable development concepts into management practices Development that meets the needs of the present without compromising the ability of future generations to meet their own needs 1 Adopting business strategies and activities that meet the needs of the business and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future 2 Sustainable development Business management incorporation Economic considerations Social considerations Environmental considerations

32. South African on-going LCM activities Closure and questions